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MARTINEZ -- Contra Costa officials will step up investigation into insurance fraud with the help of a $1.3 million state grant designed to fund the aggressive effort, the district attorney said Friday.

The California Department of Insurance and Contra Costa County District Attorney's Office announced the grant funding to help investigate and prosecute instances of workers' compensation, automobile insurance, and disability and health care fraud, District Attorney Mark Peterson said.

"Insurance fraud costs California's honest consumers and business approximately $15 billion per year," Peterson said. "The huge financial burden that insurance fraud imposes on the citizens of Contra Costa County through higher insurance premiums and the increased costs of goods and services is unacceptable."

Contra Costa County's multiple grants will fund fraud-fighting efforts, including $603,400 to fight workers' compensation insurance fraud, $20,000 for disability and health insurance fraud, $273,667 for urban auto insurance fraud (perpetrated in organized rings), and $458,903 for regular insurance fraud.

The grant money will fund salaries and benefits for at least three prosecutors and three investigators assigned to insurance fraud units, Peterson said. They will work closely with the California Department of Insurance Fraud Division and other state agencies such as the Employment Development Department, the Department of Industrial Relations, and the Contractor State Licensing Board.

California Insurance Commissioner Dave Jones, who signed a replica of the $1,355,970 check at a news conference Friday, called insurance fraud a "tremendous drain and drag on our economy."

"Workers' compensation insurance fraud places an extraordinary fiscal burden on our workers' comp system, hurts honest businesses and damages our economy," Jones said. "Auto insurance fraud drives up the price of auto insurance for consumers, and disability and health insurance fraud gouges workers and employers by way of higher premiums."

Workers' compensation fraud, which received the highest amount of grant money, can include employers cheating the system by under-reporting and misreporting employee statistics, as well as medical providers inflating hospital bills by treating unrelated ailments, Jones said. It also includes workers who make bogus claims.

Eight hundred arrests were made in 2012 for workers' compensation fraud, Jones said, with 666 total convictions.

The District Attorney's Office has utilized similar grants in the past and strives to renew the crucial funding each year.

"These grant funds make it possible for our office to continue to aggressively investigate and prosecute all types of insurance fraud," Peterson said. "I have also dedicated significant resources to public outreach and education in an effort to prevent our citizens from being victimized in the first place."

Suspected insurance fraud can be reported to the District Attorney's Office at 925-957-8604.

By Erin Ivie
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